INTRATE

The INTRATE function returns the effective annual interest rate for a security that pays interest only at maturity.

INTRATE(settle, maturity, invest-amount, maturity-amt, days-basis)

settle: A date/time value or date string representing the trade settlement date, usually one or more days after the trade date.

maturity: A date/time value or date string representing the date when the security matures. maturity must be after the date specified for settle.

invest-amount: A number value representing the amount invested in the security. invest-amount is often formatted as currency and must be greater than or equal to 0.

maturity-amt: A number value representing the total amount to be received at maturity, including both principal and interest. maturity-amt must be greater than zero.

days-basis: An optional modal value specifying the number of days per month and days per year (days-basis convention) used in the calculations.

30/360 (0 or omitted): 30 days in a month, 360 days in a year, using the NASD method for dates falling on the 31st of a month.

actual/actual (1): Actual days in each month, actual days in each year.

actual/360 (2): Actual days in each month, 360 days in a year.

actual/365 (3): Actual days in each month, 365 days in a year.

30E/360 (4): 30 days in a month, 360 days in a year, using the European method for dates falling on the 31st of a month.

Example
Suppose you are presented with an investment opportunity. The investment is a discount security offered for sale at £685 (invest-amount), will mature on 30 June 2015 (maturity) at £1,000 (maturity-amt), and the purchase will settle on 1 May 2009 (settle). =INTRATE(“1/5/2009”, “30/6/2015”, 685, 1000, 0) returns approximately 7.46045269290106%, the effective annual interest rate of the hypothetical security. This rate could be compared to the interest rate you might earn on alternative investments as part of the decision as to which investment to make.

Example

Suppose you are presented with an investment opportunity. The investment is a discount security offered for sale at £685 (invest-amount), will mature on 30 June 2015 (maturity) at £1,000 (maturity-amt), and the purchase will settle on 1 May 2009 (settle).

=INTRATE(“1/5/2009”, “30/6/2015”, 685, 1000, 0) returns approximately 7.46045269290106%, the effective annual interest rate of the hypothetical security. This rate could be compared to the interest rate you might earn on alternative investments as part of the decision as to which investment to make.

See alsoRECEIVED

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INTRATE